Harold Hamm, a US shale oil magnate, has accused Biden’s administration of making the country “unusually susceptible” to an Middle East oil price spike by draining the nation’s strategic petroleum reserves, damaging the domestic production and botching foreign policy. Continental Resources’ founder said he was “very worried” about the Middle East conflict disrupting global oil supply, while US Shale Patch has been “weakened”, unable quickly to lift output.
“They have drained SPR and refinery stocks are at their lowest level in America [in many years]. You never know when it will be needed. “It’s like having gasoline in your car,” said billionaire shale boss. “We are in a very vulnerable position.” . . “Everyone is looking [at the Middle East] now, and has for the past four years. But we had a President who was not at home.”
Commercial inventories of crude oil and petroleum have risen 25 percent in the last decade, despite the reduction of strategic reserves. Since June 2023, officials have been replenishing SPR reserve stocks, which are now 10 per cent higher than they were then at 382mn.
US oil and natural gas production is at record levels under President Joe Biden. Crude and LNG exports are also on the rise.
Kevin Book, managing partner of ClearView Energy Partners said that the US is better positioned to handle supply disruptions today than it was in the 1970s when certain Arab Opec member countries imposed an embargo against shipping crude oil to western nations, which triggered a price spike. He said that the US had “limited exposure” to high oil prices.
The comments of Hamm a prominent Republican donor Donald Trump’s campaign echo comments made by the former president who accused the Biden Administration of a “war against American energy” that was bringing the US “to the brink of world war 3”.
Hamm, the pioneer of the Shale Revolution, spoke just before Iran launched a barrage missiles against Israel in response to Israel Defense Forces ground offensives against Hizbollah.
Oil prices rose by 5 percent to $75.40 Tuesday amid fears that a larger conflict could break out in the region, which accounts for about one-third of global oil production.
Geopolitical experts have warned that any conflict with Tehran could threaten Gulf Oil and Gas exports through Strait of Hormuz. This narrow chokepoint, which borders Iran, is where 20 percent of the world’s crude oil supplies pass.
The Biden administration, and Vice-President Kamala Harriman who is running for White House on a promise to reduce the cost of goods for everyday use, would find it difficult to accept any further fuel price increases.
US petrol costs average $3.40 per gallon. This is down by about a third compared to mid-2022 when the price was higher due to a spike in crude prices after Russia invaded Ukraine. In an effort to lower domestic gasoline prices, the White House released oil from the SPR (created in response to the Arab oil embargo of the early 1970s) in 2021. After sanctions against Russia, there were fears that supply would be disrupted.
According to the US Energy Information Administration, the US has bought back some oil, but there are still 382mn barrels – about half the capacity – left in the SPR. This is enough to cover 19 days’ worth of consumption.
Hamm accused the Biden Administration of attempting to limit US oil investment through “shortsighted” policies. These included curbs on certain drilling and a pause in new liquefied gas plants. This compromises energy security during a period of increasing geopolitical risks.
Hamm said that it was important to not crash the industry further than what the current administration has already done. He also expected Harris, if elected in November, to continue the curbs. An official from the US rejected Hamm’s criticisms about the Biden administration. Washington, he said, played a proactive role in ensuring that conflicts overseas did not harm Americans.
The official stated that “we’ve achieved this by accelerating energy transition and reducing fossil fuel demand while doing so, as well as making strategic releases of the SPR.”
People said it would be a market-breaker, but it wasn’t. Then, people said that we’d have $100 oil in this year. But we didn’t. They said that we would not be able fill the SPR. We are filling up the SPR. “We put together a plan in January 2022, and have stuck with it despite all the dire forecasts.”
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.